Economic performance after incubation – an analysis of firms in the Swedish National Incubator programme
This report examines incubated firms that have participated in the national incubator program (NIP) 2005–14. Information about which firms have been incubated has been provided by Vinnova and then linked to register data by Statistics Sweden. This database allows an analysis of performance from a wide variety of parameters.
Descriptive analyses show that incubator firms differ from other firms at large. They are created in knowledge-intensive business sectors, such as research and development and advanced computer services. They also involve very highly educated individuals. Moreover, incubator firms are overrepresented outside Stockholm.
The report examines incubator performance after incubation. The analyses using economic performance as outcome compare firms incubated from NIP-participants with non-NIP incubated firms. Incubated firms are also compared with non-incubated firms, where the control group is similar in characteristics to those of incubator firms. The comparison is made through regression analyses.
The performance of incubator firms is generally worse than that of the control group. Incubator firms clearly have worse turnover performance after incubation than firms in the control group. Firms from NIP incubators, on the other hand, often have better economic performance than non-NIP incubated firms 2005–14, even though their performance still remains below that of the control group. Incubator firms in general also have lower prospects of surviving, although the short period under investigation after incubation makes this result somewhat uncertain.
The report makes two further analyses. The direction of incubator programs has previously been debated regarding whether they should be oriented towards more research-based ideas or of being more growth-oriented, adopting ideas originating from the business sector. The report finds that ideas from individuals with background in academia or the public sector are driving the main results. The weak performance is thus largely explained by incubator firm with ideas from academic/public background. But the same group also largely explains a better growth in employees among incubator firms. This means that incubator firms with ideas from the business sector perform more like firms in the control group.
The other examined dimension concerns differences in effects for incubators that have been supported by the so-called BIG-program (Business Incubation for Growth), 2011–14. The analyses show that firms from incubators supported by BIG, if anything perform worse than firms from incubators without BIG-support, regardless of whether BIG-supported incubators are among the most supported (”BIG6”) incubators or among those supported through operating expenses.